The military prepares you for a lot of things, but like any job, it never fully prepares you for retirement. A lot of military members don’t start paying real attention to their TSP until they are close to leaving service. But by then, you’re asking bigger questions like how much is in there, whether it’s enough, and what you can actually afford to do with it once you get out.
That’s the wrong time to finally tune into your TSP.
If you’re still in the military, this is the time to fix what you can. Once you leave, you can’t keep building your TSP the same way. So, if you want that money to give you more options later – whether that means a better retirement, a second career, starting a business, or investing in real estate – your work starts now.
We’re not retirement experts, we help retired military members put their TSPs to work once they get out. So, we see firsthand how having more in your TSP means having more options later.
Here are three TSP mistakes you can correct now to set yourself up for a bigger future.
1. Don’t assume you’re automatically enrolled in a TSP
This sounds basic, but a lot of service members assume their TSP is already set up the way it should be. Sometimes it is, and sometimes it isn’t.
If you joined on or after January 1, 2018, it’s likely you were automatically enrolled in the TSP at either 3% or 5%, depending on when you entered service. If you joined before 2018, you were not automatically enrolled. If you didn’t manually set that up yourself, you may not be contributing to retirement at all.
The point is, don’t assume you’re enrolled or that your contributions are set high enough to leave you with a meaningful amount when you get out. Log in and check.
Make sure you’re actually enrolled. Make sure money is coming out. Make sure the percentage is what you think it is, and that it’s enough. We’ve seen service members who thought they were contributing for decades when they weren’t, and others who assumed they were putting away more than they actually were. It’s the easiest mistake to avoid, and it will cost you.
2. Check What Fund Your TSP Contributions Are In
Being enrolled in the TSP is just the starting line. According to TSP.gov, if you were automatically enrolled, your money was probably placed into an age-appropriate Lifecycle (L) Fund unless you picked something else.
What does that mean? It means your money was sorted into a “one-size-fits-all” fund. That may be fine, but “fine” is not the same thing as intentional. It doesn’t ensure your money is working as hard as you want it. So, it’s important to take an active role in choosing which fund your money is in.
Different funds have different lifecycles, investments, and performance rates. A lot of people go years without ever checking what TSP fund they are in, whether that fund still fits their timeline, or whether they even made an active choice at all. If you are still in service, this is one of the easiest things you can clean up now.
Our rule of thumb is: if you’re counting on this account to help set you up later, then you should know what your money is invested in now.
3. Don’t Wait Until the End to Take It Seriously
This is the one that costs people the most. The best time to build your TSP is while you’re still in uniform. Once you leave service, you can no longer contribute to your TSP. Your money gets put on autopilot. You can keep the account, and you may have other options for what to do with it, but you can no longer add to it.
That’s why waiting until the last year or two to finally pay attention is such a costly mistake.
A lot of people join young. Many start at lower pay grades. They don’t contribute much in the beginning because money is tight, they don’t understand the system yet, or retirement feels too far away to care. Then promotions happen, income grows, life changes. But the TSP contribution never gets revisited.
That’s where time gets wasted.
If you’re making more now than you were a few years ago, revisit what you’re contributing. If you haven’t checked it in a long time, check it. If you set it and forgot it, go back and make sure that still makes sense.
The earlier you take an active role in building for your future, the bigger your future gets.
Build Your TSP Like You’ll Want Options Later
As a military member, retirement looks different for you. You might leave the service in your 30s or 40s. That’s still young. You aren’t just going to get out and stop living. You’ll want to do something with your life between military retirement and when you’re ready to retire permanently. You may want to start a second career, open a business, or start exploring how to invest that retirement money into other avenues.
That’s why a stronger TSP matters. Not just because “retirement someday” sounds responsible. A bigger account gives you more room to make moves when that next chapter starts.
We work with a lot of retired military members who put their TSP money to work more intentionally once they get out. And one thing is always true: the more they built while they were still in uniform, the more they had to work with later.
The people we help are looking to invest some of their TSP in passive real estate deals that add to their retirement accounts. That’s not the case for everyone. You can use your TSP money for many different types of investing once you leave service.
We like short-term real estate investing because the timelines are shorter, you’re investing in something tangible, and the returns can be higher than what you’d typically expect from more traditional retirement investing avenues. For instance, we have deals where investors get up to 25% returns in 12 months or less. That’s a huge win if wealth building or real estate investing is a goal of yours once you leave service.
No matter what you choose to do, you’ll be glad you had more money saved up to do it with.
The Golden Rule to Build Your TSP Before Leaving Service
If you’re still in the military, your job right now is simple:
✔️ Make sure you’re enrolled.
✔️ Make sure you’re contributing what you think you are.
✔️ Make sure you know what fund your money is in.
✔️ And make sure you’re not waiting until the end to finally take it seriously.
These four moves alone put you in a much better position later.
If you want to understand what some former service members do with their TSP after leaving the military, read our article on what to do with your TSP after you retire from the military or federal government. And if you’re reading this after you’ve left service and want to explore using your TSP money for passive real estate after service, book an intro call with us. We’re happy to walk you through how it works and how to get started.
